The Municipal Council, Dalhousie has been established vide Punjab Govt. Notification No. 1828 dated 17th July, 1867.
In the year 1885, the British Empire made the necessary enactments paving the way for the formation of a municipal body for the civic upkeep of Dalhousie area. 'Dalhousie Nagar Palika' was thus established in the year 1885. Dalhousie was a part of present distt Gurdaspur of Punjab. After the reorganisations of the states, Dalhousie became a part of Himachal Pradesh. In 1994 Dalhousie Nagar Palika was redisignated as 'Nagar Parishad' or Municipal Council Dalhousie.
Dalhousie Municipal Council consists of nine wards. The permanent residents of these wards elect the ward members in a democratic manner, who represnt thier wards in the council. Apart from them a few members are nominated by the state government to the municipal council.
The President and the Vice president of the Municpal Council is elected from among the members of council.